Watch out, Amazon: Here comes the Nook Tablet [Updated]

When Amazon.com announced it would start selling an Android-based tablet called the Kindle Fire, pundits jumped on a perceived mano-a-mano between the online retail giant and Apple. After all, the Fire – with its hooks in Amazon’s music, e-books and retailing operations – will be a powerfully backed challenger to the iPad 2.

But the Fire is a combatant in another battle that’s been overlooked – until now.

Barnes & Noble launched theNook Color late last year as a touchscreen-based e-reader. It was actually an Android tablet in disguise, one that became a favorite of those who like to hack and modify their gear. Subsequent software updates have given it more capabilities, but in its stock configuration, it’s still an e-reader at heart.

Now, Engadget says B&N isupping the ante and will launch a new version that’s a lot more tablet-like, packing some serious muscle. The Nook Tablet will be a lot like the Nook Color, but designed for “HD entertainment”.

Engadget snagged some documents that include, among other things, the Nook Tablet’s specs:

What we’re looking at is a 7-inch VividView IPS color touchpanel with a 1024 x 600 screen resolution (that’s 169 pixels per inch), a 1.2GHz dual-core OMAP4 processor, 1GB of RAM, dimensions of 8.1- x 5- x 0.48-inches, 16GB of inbuilt storage, a microSD expansion slot, roughly eight hours of battery life with WiFi switched off (that sinks to four hours with videos playing back), 802.11b/g/n WiFi and support for a smorgasbord of file formats including ePUB, PDF, XLS, DOC, PPT, TXT, DOCM, Flash, JPG, MP3, MP4 and AAC.

It will sell for $249 in the U.S., which is $50 more than the Kindle Fire. But it’s got twice the RAM and storage, Endgadget points out.

What makes the B&N vs. Amazon clash interesting is that the former has a brick-and-mortar presence to back up its Nook Tablet sales – and the bookseller is planning to take full advantage of those stores. The Wall Street Journal reported last week that B&N would expand its Nook Boutiques in 40 stores to boost holiday sales of its devices.

A Nook boutique is space set aside in Barnes & Noble stores dedicated to demonstrating and selling the retailer’s Nook e-readers and accessories. The boutiques typically occupy 1,000 square feet in the 704 consumer stores nationwide, with the typical store averaging 26,000 square feet. Barnes & Noble will now increase the boutiques at select stores to an estimated 2,000 square feet, it said at its annual shareholder meeting. It will do so without reducing the number of physical titles it stocks by using space formerly allocated for such products as music and DVDs.

And The Digital Reader blog quoted several B&N employees about the coming Nook Boutiques, including one who described just how the Nook sales area will look. If accurate, it sounds impressive:

. . . This morning, during our meeting, we were talking about this brand new NOOK department. Nook has never been considered a department, ever. Our store has went through an entire makeover the past couple weeks. We discontinued music/dvd/and audiobooks. we expanded Toys/Games to the back as a new department. in the center we took away the customer service counter and built a massive NOOK boutique. This space is HUGE, with bright lights, LED TVS, touch screen POS systems, the works. Our manager told us, this space was not designed to house just 2 nooks. . . .

Both Amazon and B&N are focusing their tablet offerings on the things tablets do best – media consumption. That should make them very appealing to the mass of non-geeky consumers who don’t necessarily want tablets as personal computer replacements.

If Engadget’s leak is correct, this should be a very interesting holiday season.

Update: Engadget now notes that the price of the Nook Color will be cut on Nov. 16 by $50 to $199 – which is the price of the Kindle Fire. In addition, a pending software update will bring Hulu Plus, Pandora and other services.